China steps up exports of aluminium

FE Team | Published: April 04, 2022 23:29:21

LONDON, Apr 4 (Reuters): China is stepping up exports of aluminium to fill a widening supply gap in Western markets.
The country shipped out 26,378 tonnes of primary aluminium in February, the highest monthly total since 2010. Imports collapsed over the first two months of the year, with the result that China turned a net exporter in February for the first time since November 2019.
This is a significant shift in trade patterns. China sucked in massive amounts of primary metal over 2020 and 2021 as domestic production struggled to match demand.
The pendulum is now moving in the opposite direction as high power prices curtail European production, sending both the London Metal Exchange (LME) price and physical premiums soaring.
The Western supply crunch is also incentivising an accelerating export flow of Chinese semi-manufactured products to Western markets.
Such "semis" exports have historically been the cause of much grief in the global aluminium sector, with Western countries imposing a raft of anti-dumping duties to protect domestic markets. Right now though, the rest of the world may need China's metal in whatever form it can get.
China hasn't exported much unwrought aluminium since the 2006 imposition of a 15 per cent export tax.
The world's largest producer of the metal didn't need to import much either until 2020, when domestic production started stalling as power-hungry smelters curtailed output to meet Beijing's energy efficiency targets.
China soaked up 1.065 million tonnes of primary aluminium from the rest of the world in 2020 and another 1.580 million last year.
That boom has come to an abrupt end. Imports in January and February slumped to 57,000 tonnes from 245,000 tonnes in the same period of 2021. February's tally of 18,343 tonnes was the lowest since May 2020.